REAL ESTATE
AND
NEW YORK, APRIL 29, 1916
HOW NEW YORK CITY FARED AT THE HANDS
OF THE 1916 LEGISLATURE
City Blames State for Existing Evils, Pro¬
grams are Formulated, but Debts Increase
By HON. WILLIAM M. BENNETT
ly/f ANY ycars ago a Governor, elect-
•^'â– '- ed from tip the State complained
in one of his messages that the up-State
counties were being taxed to build the
Erie Canal for the upbuilding of the
City of New York. Of recent years the
City of New York has been complain¬
ing that having 70 per cent, of the as¬
sessed valuation of the property in the
State, the city was being exploited and
over-ta.xed for the benefit of the up-State
counties. This feeling seems to have
reached a climax during the last few
inonths, and the session of the Legis¬
lature just closed was marked by an
acrimonious dispute on this question.
City Blames the State.
The administration of tliis city, goad¬
ed by the desperate financial situation
of the municipality started on a cam¬
paign last year to charge all of the
financial misery of the city to the Legis¬
lature. Certain members of the Legis¬
lature lent themselves to this scheme
this spring to the extent of calling a
"rump" session of the Legislature at
the City Hall. The result was that,
goaded on by the city administration
and by these members of the Legisla¬
ture, the feeling between the city and
fhe up-State became accentuated to a
greater extent than ever before.
The result of this crimination and re¬
crimination, however, was that the
Mayor's conference split up into three
groups and three programs were evolv¬
ed. First came the program of the Tax
Reduction Committee, which was limit¬
ed to a few concrete suggestions for the
relief of the city by having the State
pay to the city certain items of State
revenues and taking over from the city
certain items of expense borne by the
city, but which should properly be borne
by the State. -
The Mayor's Program.
The Mayor, however, was not con-
lent with this program, but apparently
thought the opportunity ripe to obtain
the passage of certain bills, and thus
arose the second program or the Mayor's
program. For example, the Mayor had
introduced at Albany a bill to put the
Departments of Charities and Correc¬
tions and Bellevue and Allied Hospitals
under the Board of Health. Many have
thought, for a long time, that these
three departments ought to be consoli¬
dated under a business man as manager,
but the idea of putting the other two
departments under the Board of Health
aroused such a storm of protest that this
bill was withdrawn.
Instead of advocating the consolida¬
tion of the Department of Bridges with
the Department of Docks and Ferries,
the Mayor sent up a bill to continue
the Department of Bridges, under the
title of the "Department of Plant and
"Structure," and to put under its jurisdic¬
tion the construction, alteration, main¬
tenance, upkeep and repair of all the
buildings now managed by the five
.Borough Presidents, the Police Depart¬
ment, Fire Department, Health Depart¬
ment, Department of Street Cleaning,
Department of Charities and Correc¬
tions, Bellevue and .Allied Hospitals, and
HO.N. WILLIAM M. BENNETT.
also the upkeep and repair of all
vehicles, boats and other apparatus. So
far as could be ascertained, this bill was
not favored by the Board of Estimate,
and in the opinion of many people would
result in confusion and in the building
up of a political machine on account of
the patronage thus placed in one de¬
partment. This bill was not on the
program of the Tax Reduction Com¬
mittee.
Still Another Program.
In addition to these and other bills
in the Mayor's program there was still
a third program, namely, the Brown
Committee program, which included the
enactment of the "pay-as-you-go" policy
into a hard and fast law, the result of
which will be to make the new Court¬
house, all new bridges, hospitals, school
houses, T^arks and all other permanent
improvements, except docks, subways
and waterworks, payable out of the an¬
nual tax levy. This bill is probably a
good bill, but will result either in the
shutting down on improvements for
some years to come or else in a tre¬
mendous jump in the tax rate. Another
bill advocated by the Brown Commit¬
tee, but opposed by the Tax Reduction
Committee, was the bill to advance the
date of payment of taxes one month a
year for four years. The Tax Depart¬
ment of the city pointed out that this
would not result in a gain, but in a loss
of several million dollars to the city,
but it passed the Legislature.
.As a result of the Mitchel program
and the Brown Committee program,
both of which had many bills not con¬
tained in the program of the Tax Re¬
duction Committee, the program of the
Tax Reduction Cominittee was lost sight
of and many of their bills did not pass,
or else were made to take effect next
year instead of immediately. One of
their bills which did pass provides that
half of the motor vehicle tax should
be returned to the localities. As New
York Citv pays only 45 per cent, of the
motor vehicle tax, this will result in
about $400,000 being paid back to New
York City and about $600,000 being paid
liack to the up-State localities.
There will have to be a direct tax
next year to replace this $1,000,000 thus
taken out of the State Treasury. Of
this direct tax. New York City will pay
70 per cent. In other words. New York
City will receive from the State by this
bill $400,000 and pay back to the State
$700,000, thus making the citv a loser
by about $300,000 as a result o"f this bill
urged by the Tax Reduction Commit¬
tee.
One thing, however, stands out promi¬
nently, namely, that the Legislature has
appropriated for the coming fiscal year
at least $15,000,000 in excess of the esti¬
mated revenues of the State for the
same period. The treasury starts with
a surplus of $10,000,000, as a result of
last year's direct tax, but that is capital
and not revenue. As a result of these
appropriations in excess of revenues,
there will undoubtedly be a deficit at
the end of the coming fiscal year, and
another direct ta.x will have to be im¬
posed, which, of course, will not be very
pleasant for New York City.
A direct ta.x, however, is the rule and
not the exception. In 1906, Governor
Higgins called attention to the fact that
for the first time in 65 years the State
would have no direct tax. In my
opinion, it would have been better policy,
economically and politically also, for the
Legislature to have provided for part
of this deficit this year by a direct tax.
By leaviiig the entire direct tax to be
imposed next year, the Legislature has
injected into the Mayoralty campaign
of 1917 an issue which will be given
greater prominence than it is entitled to.
State Debt Increases.
.\nother thing that developed at the
session was that the State is rapidly
getting into the same financial condition
as the City of New York. On January
1, 1895. the State was absolutely free
from debt. It now has a debt of $200,-
000,000. In 1894 the total appropria¬
tions for all purposes were only $15,000,-
000. Last year the total appropriations,
including reappropriations, amounted to
$85,000,000, and this year they will
amount to between $70,000,000 and
$80,000,000. By 1920 the State will have
spent more than $100,000,000 for high¬
ways, and will then not have a complete
highway system.
The State has issued fifty-year_ bonds
to build highways and yet certain por¬
tions of the construction work will have
to be replaced ten times before the
bonds mature. The result is that by
1920 the maintenance of the State high¬
ways will cost the State $8,000,000 a
year annually. It is a grave question
as to whether the State should not
abandon its present systeni of highway
construction and maintenance and re¬
turn to the old method.
.\ book might be written on this sub¬
ject, but enough has been said to show •
that it behooves both the State and the
city to stop all extravagances for a
number of years and give the taxpay¬
er a chance to catch VV- _ ...